DRAFT RULES UNDER THE COMPANIES ACT, 2013

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1 DRAFT RULES UNDER THE COMPANIES ACT, 2013 CHAPTER XX COMPANIES (WINDING UP) RULES 2013 Ministry of Corporate Affairs Notification New Delhi Dated GSR No..:- In exercise of the powers conferred by section 468 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules:- 1. Short title and commencement: (1) These rules may be called the Companies (Winding up) Rules, (2) They shall come into force on the date of their publication in the official gazette. Definitions 2.In these rules, unless the context otherwise requires, (1) Act means the Companies Act, (2) Annexures means an annexure to these rules. (3) Section means the section of the Act. (4) Tribunal means the National Company Law Tribunal. (5) Words and Expressions:- Save as aforesaid, and unless the context otherwise requires, words and 1

2 expressions contained in these rules shall bear the same meaning as in the Act, and the General Clauses Act, 1897 for the interpretation of these rules, and save as above words and expressions contained in Companies Rules, 2013, National Company Law Tribunal Rules, 2013 and National Company Law Appellate Tribunal Rules, 2013 shall apply to these rules. 3. FORMS Forms means forms prescribed in Annexure- A to these rules with such variations as may be necessary. 4. FEES Fees means fee as prescribed in Annexure-B to these rules. Part-II Winding-up by Tribunal 5. Winding-up petition and its hearing: (1) Petition for winding-up along with the statement of affairs For the purposes of sub-section (1) of section 272, a petition for windingup of a company shall be presented in Form No. 1, 2, or 3, as the case may be, with such variations as circumstances may require, and shall be presented in triplicate. If the petition is made by the company, it shall be accompanied with the statement of its affairs in Form No. 4 as required under sub-section (5) of section 272 and shall state the facts up to the date which shall not be a date more than fifteen days prior to the date of making of the statement. This statement shall be duly certified by a Chartered Accountant in practice. The fee for filing the petition shall be as prescribed in Annexure-B 2

3 (2) Admission of petition and directions as to advertisement - Upon the filing of the petition, it shall be listed before the Tribunal for admission and fixing a date for its hearing and for directions as to the advertisements to be published and the persons, if any, upon whom copies of the petition are to be served. Where a petition has been filed by a person other than the company, the Tribunal shall if it thinks fit, direct notice to be given to the company and give an opportunity of being heard, before giving directions as to the advertisement of the petition. (3) Petition by a contingent or prospective creditor (i) A contingent or prospective creditor is one who is able to prove that he has a bonafide and prima facie case to establish his claim to the satisfaction of the Tribunal and his application shall be in accordance with sub-section (6) of section 272 to seek the leave of the Tribunal for the admission of the petition in Form No. 5. along with the fees as prescribed in Annexure -B Provided that no leave shall be granted, unless in the opinion of the Tribunal there is a prima facia case for winding up of the company and until such security for costs has been given as the Tribunal thinks reasonable. (ii)no advertisement of the petition shall be made unless the leave has been granted, or where the leave has been granted subject to any conditions precedent to the admission of the petition, unless such conditions have been satisfied. (4) Copy of petition to be furnished -Every contributory or creditor of the company shall be entitled to be furnished by the petitioner or by his authorized representative with a copy of the petition. In case such copy is not so provided, the contributory or creditor may apply to the 3

4 Registry of the Tribunal, which shall provide an electronic copy on payment of fee as prescribed in Annexure-B (5) Advertisement of petition -Subject to directions of the Tribunal, the petition shall be advertised in not less than fourteen days before the date fixed for hearing in one daily newspaper in English language and one daily newspaper in the principal regional language circulating in the state or union territory where the registered office of the Company is situated. The advertisement shall be in Form No. 6. (6) Application for withdrawal of petition - (i) The Tribunal may allow to withdraw the petition subject to such orders including about costs as may be considered appropriate. (ii) An application to withdraw a petition for winding-up which has been advertised in accordance with the provisions of Rule 5 shall not be considered at any time before the date fixed in the advertisement for the hearing of the petition. (7) Substitution of creditor or contributory for original petitioner Where a petitioner (i) is not entitled to present a petition, or (ii) fails to advertise his petition within the time prescribed by these rules or by order of the Tribunal, or (iii) consents to withdraw the petition, or to allow it to be dismissed, or 4

5 the hearing to be adjourned or fails to appear in support of his petition when it is called on in Tribunal on the day originally fixed for the hearing thereof, or any day to which the hearing has been adjourned, or (iv) if appearing, does not apply for an order in terms of the prayer of his petition, or, (v) where in the opinion of the Tribunal there is other sufficient cause for an order being made under this rule, the Tribunal may, upon such terms as it may think just, substitute as petitioner any creditor or contributory who, in the opinion of the Tribunal, would have a right to present a petition, and who is desirous of prosecuting the petition. (8) Affidavit-in-Opposition: - (i) Subject to section 274 of the Act, any Affidavit intended to be used in opposition of the petition shall be filed not less than five days before the date fixed for hearing of the petition, and a copy of the affidavit shall be served on the petitioner or his authorized representative forthwith. (ii) For the purposes of sub section (1)of section 274 of the Act, where a petition for winding up is filed before the Tribunal by any person other than the Company, the Tribunal shall, if satisfied that a prime-facie case for winding up has been made out, by an order direct the company to file its objections through an affidavit along with statement of affairs in Form No. 4 within 30 days of the order. Copy of the affidavit along with the statement of affairs shall be served on the petitioner or his authorized representative forthwith. (iii) Copies of the affidavit shall also be given to any creditor or 5

6 contributory appearing in support of the petition, who may require the same, on payment of the prescribed charges/fees. (9) Affidavit in reply: - A rejoinder intended to be used in reply to the affidavit filed in opposition to the petition shall be filed not less than two days before the date fixed for hearing of the petition, and a copy of the rejoinder to reply shall be served on the day of filing thereof on the person by whom the affidavit in opposition was filed or his authorized representative. (10) Procedure on substitution - Where the Tribunal makes an order substituting a creditor or contributory as petitioner in a winding-up petition, it shall adjourn the hearing of the petition to a date to be fixed by the Tribunal and direct such amendments of the petition as may be necessary. Such creditor or contributory shall, within seven days from the making of the order, amend the petition accordingly, and file two amended copies thereof together with an affidavit in duplicate setting out the grounds, on which he supports the petition. The amended petition shall be treated as the petition for the winding-up of the company and shall be deemed to have been presented on the date on which the original petition was presented. 6. PROVISIONAL LIQUIDATOR (1) Appointment of Provisional Liquidator - (i) Tribunal may by an order appoint either Official Liquidator or a liquidator from the panel maintained by the Central Government as Provisional Liquidator. An order appointing a provisional liquidator shall be in Form No. 7and the intimation of such appointment of a provisional liquidator shall be in Form No. 8 within a period of seven days from the date of passing of the order alongwith a copy of the petition, copy of 6

7 Statement of Affairs and the affidavit, if any, filed in support thereof. (ii) The Provisional Liquidator who is appointed from the panel shall file a declaration in Form No. 9making disclosures in accordance with sub section (6) of section 275. Thereafter, on the order of the Tribunal as per sub section (1) of section 283, the Provisional Liquidator shall forthwith take into his custody or under his control all the properties, effects, actionable claims and books and papers of the company, and it shall be the duty of all persons having custody of any of the property, books and papers of the company, to deliver possession thereof to the Provisional Liquidator. (iii) Subject to any order of the Tribunal, all the costs, charges and expenses incurred by the Provisional Liquidator shall be paid out of the assets of the company. (iv) EveryProvisional Liquidator appointed from the panel, shall before entering uponhis duties as such liquidator, furnish securityof such sum and in such manner as the Tribunal may direct. The cost of furnishing the required security shall be borne by the liquidator and shall not be charged against the assets of the company as an expense incurred in winding up.such security shall be provided through Form No.10. (v) If the Tribunal is of the opinion that the security furnished by the liquidator under clause (iv) above is inadequate, the Tribunal may require the liquidator to furnish additional security. Where the security furnished is excessive, the liquidator may apply to the Tribunal for reducing the amount of security, and the Tribunal may make such order thereon as it think fit. 7

8 (2) Rules applicable to Provisional Liquidator In pursuance of sub-section (3) of section 275, the rules relating to Company Liquidators shall apply to Provisional Liquidators, so far as applicable, subject to such variations as the Tribunal may direct in each case. 7. WINDING-UP ORDER (1)Order to be sent to Company Liquidator and Registrar of Companies and form of order- (i) Tribunal may by an order appoint either Official Liquidator or liquidator from the panel maintained by the Central Government as Company Liquidator. For the purposes of sub section (1) of section 277, the order for winding up shall be in Form No. 11and shall be sent within a period not exceeding seven days from the date of passing of the order, to the Company Liquidator and the Registrar of Companies in Form No. 12 and 13 respectively. In case of a listed company, the Registrar of Companies shall send intimation of such order to the stock exchange, where the securities of the company are listed. The copy of the order shall be accompanied by a copy of the petition, copy of Statement of Affairs and the affidavit, if any, filed in support thereof. (ii) Except where a company is the petitioner, the Company Liquidator shall cause a sealed copy of the order to be served upon the company by RegisteredAD or other recognized modes of service as per section 20 of the Act addressed at its registered office (if any), or, if there is no registered office, at its principal or last known principal place of business, or upon such other person or persons or in such manner as the Tribunal 8

9 may direct. (2) Contents of winding-up order An order for winding-up of the company in Form No. 11shall contain a footnote stating that (i) it will be the duty of such of the persons as are liable to submit books of account of the company completed and audited up to the date of order, to attend on the Company Liquidatorat required time and place and give him all the information and (ii) it will be the duty of every person who is in possession of any property, books or papers, cash or any other assets of the company, including the benefits derived therefrom, to surrender forthwith such property, books or papers, cash or other assets and the benefits so derived, as the case may be, to the Company Liquidator. (3)Directions on making the winding-up order and advertisement of the order (i) At the time of making the winding-up order, or at any time thereafter, the Tribunal shall give directions as to the advertisement of the order and the persons, if any, on whom the order shall be served and the persons, if any, to whom notice shall be given of the further proceedings in the liquidation, and such further directions as may be necessary. (ii) Save as otherwise ordered by the Tribunal, every order for the winding-up of a company by the Tribunal, shall within fourteen days of the date of making the order, be advertised by the petitioner in English and Vernacular language in one issue of a newspaper in the English language and a newspaper in the principal regional language respectively circulating in the State or the Union Territory concerned and shall be served by the petitioner upon such person, if any, and in such manner as the Tribunal may direct including publication on the website of the Tribunal if any or MCA 21 portal. The advertisement shall be in Form No. 9

10 14. (4) Declaration by Company Liquidator (i)for the purposes of sub-section (6) of section 275, the Company Liquidator appointed by the Tribunal from the panel maintained by the central government at the time of passing of the order of winding-up shall file a declaration in Form No. 9 disclosing conflict of interest or lack of independence in respect of his appointment, if any, with the Tribunal within seven days from the date of appointment. (ii) Every Liquidator appointed from the panel, shall before entering upon his duties as company liquidator, furnish security of such sum and in such manner as the Tribunal may direct. The cost of furnishing the required security shall be borne by the liquidator and shall not be charged against the assets of the company as an expense incurred in the winding up. Such security shall be provided through Form No.10. (iii) If the Tribunal is of the opinion that the security furnished by the liquidator under clause (iv) above is inadequate, the Tribunal may require the liquidator to furnish additional security. Where the security furnished is excessive, the liquidator may apply to the Tribunal for reducing the amount of security, and the Tribunal may make such order thereon as it think fit. (5)Company Liquidator to take charge of assets and books and papers of company- On an order of the Tribunal, the Company Liquidator shall, forthwith take into his custody or under his control all properties, effects, actionable claims and books and papers of the company, and it shall be the duty of all persons having custody of any of the properties, books and papers of the company, to deliver possession 10

11 thereof to the Company Liquidator. (6)Form of proceedings after winding-up order is made - After a winding-up order is made, every subsequent proceeding in the windingup shall bear the original number of the winding-up petition besides its own distinctive number, but against the name of the company in the cause-title, the words 'in liquidation' shall appear in brackets. 8. APPLICATIONS UNDER SECTION 279 Application for leave to commence or continue suit or proceeding - An application under sub-section (1) of section 279 for leave of the Tribunal to commence or continue any suit or proceeding against the company shall be made in Form No 15 upon notice to the Company Liquidator and the parties to the suit or proceeding sought to be commenced or continued and Tribunal shall dispose off such application within sixty days. 9. REPORTS BY COMPANY LIQUIDATOR UNDER SECTION 281 (1) Report by Company Liquidator (i). The report to be submitted by the Company Liquidator under subsection (1) of section 281 shall be in Form No. 16 within sixty days from the order. The report shall also contain the viability plan of the business of company or the steps which are necessary for maximizing the value of the assets of the company. The Company Liquidator may make further report or reports, if he thinks fit, according to the provisions of sub-section (4) of section 281. (ii) The Company Liquidator while making the report in accordance with sub-rule (1), shall state in such report the manner in which the company was promoted or formed and whether in his opinion, any fraud has been committed by any person in the promotion or formation or managing the 11

12 affairs of the company or by any officer in relation to the company since its formation, and shall set out the names of the persons by whom the fraud, in his opinion, was committed and the facts on which such opinion is based. The report shall set out in a narrative form facts and matters which the Company Liquidator desires to bring to the notice of the Tribunal. (iii) The Company Liquidator shall, along with the report prepared in accordance with the sub-rule (1), attach a report in Form No. 17 on the viability of the business of the company or the steps which, in his opinion, are necessary for maximizing the value of the assets of the company. (iv) It shall be the duty of the promoters, directors, officers, employees and the person so authorised, as and when required, to attend on the Company Liquidator and answer all such questions as may be put to them, give all such further information as may be required from them, and provide such assistance as may be required by the Company Liquidator. (v) The Tribunal shall, within seven days from the receipt of such report, fix a date for the consideration thereof by the Tribunal and notify the date on the notice board/website of the Tribunal. Such date shall also be notified to the Company Liquidator and also the concerned company. (2)Inspection of statement of affairs and report In pursuance of sub-section (5) of section 281, every creditor or contributory, by himself, or by his agent, shall be entitled to inspect the statement of affairs submitted under sub-section (5) of section 272 or sub-section (1) of section 274 and the report of the Company Liquidator submitted under rule 18(1), on payment of such fee and to obtain copies thereof or extracts therefrom on payment of fee at such rate, as prescribed in Annexure-B 12

13 (3) Report by the Company Liquidator -The Company Liquidator shall pursuant to section 281, place his report before the Tribunal. The Company Liquidator shall provide the Tribunal with the information / explanation required and any further information or explanation with reference to the matters contained therein which the Tribunal may require. On a consideration of the report (s), the Tribunal may pass such order(s) and give such directions as it may think fit including directions under section SETTLEMENT OF THE LIST OF CONTRIBUTORIES (1)Provisional List of contributories - (i) For the purposes of sub-section (1) of section 285, unless the Tribunal dispenses with the settlement of a list of contributories, the Company Liquidator shall prepare and file in the Tribunal not later than twenty one days after the date of the winding up order a provisional list of contributories of the company with their names and addresses, the number of shares, the amount called up and the amount paid up in respect of such shares, and distinguishing in such list the several classes of contributories. (ii) The list shall consist of every person who was a member of the company at the commencement of the winding-up or his representative, and shall be divided into two parts, the first part consisting of those who are contributories in their own right, and the second part, of those who are contributories as being representatives of, or liable for the debts of, others, as is required under sub-section (2) of section 285. The lists shall be in Form No. 18. (2)Notice to be given of date of settlement - 13

14 (i) Upon the filing of provisional list of contributories mentioned in sub rule (1 ), the Company Liquidator shall obtain date from the Tribunal for settlement of the list of contributories and shall give notice of the date appointed to every person included in such list, stating in such notice in what character and for what number of shares such person is included in the list, the amount called up and the amount paid up in respect of such shares, and informing such person by such notice that if he intends to object to his being settled as a contributory in such character and for such number of shares as mentioned in the list, he should file in the Tribunal his affidavit, if any, in support of his contention and serve a copy of the same on the Company Liquidator not less than two days before the date fixed for the settlement, and appear before the Tribunal on the date appointed for the settlement in person or by authorised representative. Such notice shall be in Form No. 19, and shall be sent by Registered AD or other recognized modes of service as per section 20 of the Act for acknowledgment to every person included in the list so as to reach him in the ordinary course of post not less than fourteen days before the date fixed for the settlement. (ii) An affidavit in Form No. 20 relating to the dispatch of notice, shall be filed in the Tribunal not later than two days before the date fixed for the settlement of the list. (3)Settlement of the list - On the date appointed for the settlement of the list, the Tribunal shall hear any person who objects to being settled as a contributory or as a contributory in such character or for such number of shares as is mentioned in the list, and after such hearing, shall finally settle the list in accordance with sub-section (1) of section 285. The list 14

15 when settled shall be certified by the Tribunal under its seal and shall be in Form No. 21. (4)Notice of settlement to contributories - (i) Upon the settlement of the list of contributories, the Company Liquidator shall forthwith give notice to every person placed on the list of contributories as finally settled, stating in what character and for what number of shares he has been placed on the list, what amount has been called up and what amount paid up in respect of such shares and in the notice he shall inform such person that any application for the removal of his name from the list or for a variation of the list, must be made to the Tribunal within fifteen days from the date of service on the contributory of such notice. Such notice shall be in Form No. 22, and shall be sent to each person settled on the list by Registered AD or other recognized modes of service as per section 20 of the Act for acknowledgment at the address mentioned in the list as settled. (ii) An affidavit of service relating to the despatch of the notices to the contributories under this Rule shall be filed in the Tribunal within seven days of the settlement of the list of contributories by the Tribunal. Such affidavit shall be in Form No. 23. (5) Supplemental list of contributories - The Tribunal may add to the list of contributories by a supplemental list or lists and any such addition shall be made in the same manner in all respects as the settlement of the original list. (6)Variation of list - Save as provided in the immediate preceding rule, 15

16 the list of contributories shall not be varied, and no person settled on the list as a contributory shall be removed from the list, or his liability in any way varied, except by an order of the Tribunal and in accordance with such orders. (7) Application for rectification of list -If after the settlement of the list of contributories, the Company Liquidator has reason to believe that a contributory who had been included in the provisional list has been improperly or by mistake excluded or omitted from the list of contributories as finally settled or that the character in which or the number of shares or extent of interest for which he has been included in the list as finally settled or any other particular contained therein, requires rectification in any respect, he may, upon notice to the contributory concerned, apply to the Tribunal for such rectification of the list as may be necessary, and the Tribunal may on such application, rectify or vary the list as it may think fit. (8)List of contributories consisting of past members- It shall not be necessary to settle a list of contributories consisting of the past members of a company, unless so ordered by the Tribunal. Where an order is made for settling a list of contributories consisting of the past members of a company, the provisions of these Rules shall apply to the settlement of such list in the same manner as they apply to the settlement of the list of contributories consisting of the present members. 11. ADVISORY COMMITTEE (1)Meeting of creditors and contributories -The meeting of the creditors and contributories in accordance with the provisions of sub- 16

17 section (3) of section 287 for the purpose of determining the persons who shall be the members of the Advisory Committee, shall be convened, held and conducted in the manner hereinafter provided by these rules for the holding and conducting of meetings of creditors and contributories. However, on application made by the company liquidator the Tribunal may exempt any procedure or manner of conducting the meetings or prescribe any alternative procedure or manner, considering the availability of fund with the company liquidator or number of creditors and contributories. (2)Company Liquidator to report result of meeting (i)the Company Liquidator shall not later than seven days after the holding of the meetings of the creditors or contributories, report the result thereof to the Tribunal. Such report shall be in Form No. 24. (ii) Where the creditors and contributories have agreed upon the constitution and composition of the Advisory Committee and the persons who are to be members thereof, an Advisory committee shall, subject to the provisions of sub-section (2) of section 287, be constituted in accordance with such decision, and the Company Liquidator shall set out in his report the names of the members of the Advisory Committee so constituted. (iii) Where the creditors and contributories have not agreed upon the constitution and composition of the Advisory Committee and the persons who are to be members thereof, the Company Liquidator shall, at the time of making his report as aforesaid, apply to the Tribunal for directions as to whether there shall be an Advisory Committee, and if so, what shall be its composition, and who shall be the members thereof, 17

18 and the Tribunal shall thereupon fix a date for the consideration of the report of the Company Liquidator. Notice of the date so fixed shall be advertised by the Company Liquidator in such manner as the Tribunal shall direct not less than seven days before the date fixed. The advertisement shall be in Form No. 25. (iv) On the date fixed for hearing of the said application for directions, the Tribunal may, after hearing the Company Liquidator and any creditor or contributory who may appear, appoint an Advisory Committee, or dispense with the appointment of an Advisory Committee, or pass such orders or give such directions in the matters, as the Tribunal may think fit. (v) Notwithstanding anything contained in this rule, in regard to composition of the Advisory Committee, where the Liquidator of the company is from the panel maintained by the Central Government, the Committee shall include the Official Liquidator of the concerned jurisdiction or his nominee who is not below the rank of the Assistant Official Liquidator as one of the members of the Advisory Committee. (vi) In case the Official Liquidator or his nominee is not able to attend the meeting of the Advisory Committee, he may forward his advice in writing to the Company Liquidator. (vii) In the event of disagreement with the advice rendered by the Official Liquidator or his nominee, the reasons of such disagreement shall be recorded in the minutes of the Advisory Committee meeting. (viii) As per sub-section (1) of section 288, the Company Liquidator shall make quarterly reports to the Tribunal in Form No. 26 with respect to the progress of winding up of the company. (3)Filling up of the vacancy in Advisory Committee 18

19 (i) On a vacancy occurring in the Advisory Committee, the Company Liquidator shall forthwith summon a meeting of creditors or of contributories, as the case may require, within a period of seven days to fill the vacancy; and the meeting may, by resolution, re-appoint the same, or appoint another, creditor or contributory to fill the vacancy: Provided that if the Company Liquidator, having regard to the position in the winding up, is of the opinion that it is unnecessary for the vacancy to be filled, he may apply to the Tribunal and the Tribunal may make an order that the vacancy shall not be filled, or shall not be filled except in such circumstances as may be specified in the order. The continuing members of the Advisory committee, if not less than two, may act notwithstanding any vacancy in the Advisory committee. Where the creditors or contributories, as the case may be, fail to fill the vacancy for whatever reason, the Company Liquidator shall forthwith report such failure to the Tribunal and Tribunal may, by order, fill such vacancy. (4)CompanyLiquidator and members of the Advisory Committee dealing with company's assets - Neither the Company Liquidator nor any member of the Advisory Committee shall, while acting as liquidator or member of such committee in any winding-up, either directly or indirectly, by himself or through his employer, partner, clerk, agent, servant, or relative, become a purchaser of any part of the company's assets, except by leave of the Tribunal. Any such purchase made contrary to the provisions of this rule may be set aside by the Tribunal on the application of the Company Liquidator or of a creditor or contributory, as the case may be, and the Tribunal may make such order as to costs as it may think fit. 19

20 (5)Cost of obtaining sanction of Tribunal -In any case in which sanction of the Tribunal is obtained under the last two preceding rules, the costs of obtaining such sanction shall be borne by the person in whose interest such sanction is obtained and shall not be payable out of the company s assets. (6) Meetings of the Advisory Committee For the purposes of subsection (5) of section (i) The advisory committee shall meet at such times as it may from time to time appoint and the Company liquidator or any member of the committee may also call a meeting of the committee as and when he thinks necessary. (ii) The quorum for a meeting of the advisory committee shall be onethird of the total number of the members, or two, whichever is higher. (iii) The advisory committee may act by a majority of its members present at a meeting, but shall not act unless a quorum is present. (iv) A member of the advisory committee may resign by notice in writing signed by him and delivered to the Company Liquidator. (v) If a member of the advisory committee is adjudged an insolvent, or compounds or arranges with his creditors, or is absent from five consecutive meetings of the committee without the leave of those members who, together with himself, represent the creditors or contributories, as the case may be, his office shall become vacant. (vi) A member of the advisory committee except the Official Liquidator or his nominee appointed as committee member may be removed at a meeting of creditors if he represents creditors, or at a meeting of contributories if he represents contributories, by an ordinary resolution of 20

21 which seven days' notice has been given, stating the object of the meeting. 12. MEETINGS OF CREDITORS AND CONTRIBUTORIES (1)Notice of meeting -(i) The Company Liquidator shall summon meetings of the creditors and contributories by giving not less than fourteen daysnotice of the time and place appointed for the meeting by an advertisement in one daily newspaper in the English language and one daily newspaper in the principal regional language circulating in the State or Union Territory where the registered office of the Company is situated, and by sending individually to every creditor of the company notice of the meeting of creditors, and to every contributory of the company notice of the meeting of contributories, by sending letters by Registered AD or other recognized modes of service as per section 20 of the Act so as to reach such person in the ordinary course of post not less than seven days before the date appointed for the meeting. (ii) The notice to each creditor shall be sent to the address given in his proof or, if he has not proved, to the address given in the statement of affairs, or, to the address given in the books of the company, or to such other address as may be known to the person summoning the meeting. The notice to each contributory shall be sent to the address mentioned in the books of the company as the address of such contributory or to such other address as may be known to the person summoning the meeting. (iii) The notices shall be in Forms No. 27 as may be applicable. (2) Place and time of meeting. - Every meeting shall be held at such place and time as the Company Liquidator considers most convenient for 21

22 the majority of the creditors or contributories or both. Different times or places or both may, if thought fit, be appointed for the meetings of creditors and the meetings of contributories. (3)Notice of first or other meeting to officers of company.- (i) The Company Liquidator shall also give, to each of the officers of the company, who in his opinion ought to attend the first or any other meeting of creditors or contributories, seven days' notice in Form No. 28 of the time and place appointed for such meeting. The notice may either be delivered personally or sent by Registered AD or otherrecognized modes of service as per section 20 of the Act for acknowledgment as may be convenient. It shall be the duty of every officer who receives notice of such meeting to attend if so required by the Company Liquidator, and if any such officer fails to attend, the Company Liquidator may report such failure to the Tribunal and the Tribunal may issue such directions to such person as it thinks fit. (ii) The Company Liquidator, if he thinks fit, may instead of requiring any of the officers of the company to attend the meeting as aforesaid, require such officer to answer any interrogatories or to furnish in writing any information that he may require for purposes of such meeting, and if such officer fails to answer the interrogatories or furnish such information, he shall report such failure to the Tribunal and the Tribunal may issue such directions to such person as it may think fit. (4) Proof of notice- A declaration by way of Affidavit by the Company Liquidator who sent the notices, that such notices have been duly sent, shall be sufficient evidence of the notices having been sent to the persons 22

23 to whom the same were addressed. The declaration supported with proof of service shall be filed in the Tribunal in Form No. 29. (5) Costs of meetings -The cost of convening and conductingthe meetings of the creditors or contributories shall be met out of the assets of the company. (6) Chairman of meetings The Company Liquidator or some person nominated by him shall be the chairman of the meeting. The nomination shall be in Form No. 30. (7)Resolution at creditors' meeting -At a meeting of creditors, a resolution shall be deemed to be passed, when a majority in number and value of the creditors present personally or by proxy and voting on the resolution have voted in favour of the resolution. In a winding-up by the Tribunal, the value of a creditor, shall, for the purposes of a first meeting of the creditors held under section 287, be deemed to be the value as shown in the books of the company, or the amount mentioned in his proof, whichever is less and for the purposes of any other meeting, the value which the creditor has proved his debt or claim. (8)Resolution of contributories' meeting -At a meeting of the contributories, a resolution shall be deemed to be passed when a majority in number and value of the contributories present personally or by proxy and voting on the resolution have voted in favour of the resolution. The value of the contributories shall be determined according to the number of votes to which each contributory is entitled as a member of the company under the provisions of the Act, or the articles of the company, as the case may be. 23

24 (9) Copies of resolutions to be filed.- The Company Liquidator shall file in the Tribunal, a copy certified by him of every resolution passed at a meeting of creditors or contributories. The Registrar shall keep in each case a file of such resolutions. (10)Non-receipt of notice by a creditor or contributory.-where a meeting of creditors or contributories is summoned by notice, the proceedings and resolutions at the meeting shall, unless the Tribunal otherwise orders, be valid notwithstanding that some creditors or contributories may not have received the notice sent to them. (11) Adjournments.-The chairman may, with the consent of the meeting, adjourn it, but the adjourned meeting shall be held not later than seven days at the same place as the original meeting unless in the resolution for adjournment another place is specified or unless the Tribunal otherwise orders. (12) Quorum.-A meeting may not act for any purpose except for adjournment thereof unless there are present or represented thereat in the case of a creditors' meeting at least three creditors entitled to vote or in the case of a meeting of contributories at least three contributories or all the creditors entitled to vote or all the contributories, if the number of creditors entitled to vote or the number of contributories as the case may be shall not exceed three. (13)Procedure in the absence of quorum.-if, within half an hour from the time appointed for the meeting, a quorum of creditors or contributories, as the case may be, is not present or represented, the 24

25 meeting shall be adjourned to the same day in the following week at the same time and place. If at such adjourned meeting, a quorum be not present, two creditors or contributories present in person shall form a quorum and may transact the business for which the meeting was convened. Provided that at the adjourned meeting two creditors or the contributories, as the case may be, are not present, the chairman shall submit his report to the Tribunal for such directions as the Tribunal may deem fit. (14)When creditor can vote.-in the case of a meeting of creditors held under section 287 or of any adjournment thereof a person shall not be entitled to vote as a creditor unless he has duly lodged with the Company Liquidator not later than the time mentioned for that purpose in the notice convening the meeting, a proof of the debt which he claims to be due to him from the company. In the case of other meetings of creditors, a person shall not be entitled to vote as a creditor unless he has lodged with the Company Liquidator a proof of the debt which he claims to be due to him from the company and such proof has been admitted wholly or in part before the date on which the meeting is held: Provided that this Rule and the next four following Rules shall not apply to a meeting of creditors held prior to the meeting of creditors under section 287: Provided further that these Rules shall not apply to any creditors or class of creditors who by virtue of these Rules or any directions given thereunder are not required to prove their debts, or to any voluntary 25

26 liquidation meetings. (15) Cases to which creditors may not vote. - A creditor shall not vote in respect of any unliquidated or contingent debt or any debt the value of which is not ascertained, nor shall a creditor vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him unless he is willing to treat liability to him thereon of every person who is liable thereon antecedently to the company, and against whom no order of adjudication has been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for purposes of dividend, to deduct it from his proof. (16)When secured creditor can vote. - (i) For the purposes of voting at a meeting, in a winding-up by the Tribunal, a secured creditor shall, unless he surrenders his security, state in his proof the particulars of his security, the date when it was given and the value at which he assesses it, and shall be entitled to vote only in respect of the balance due to him, if any, after deducting the value of his security. (ii) For the purposes of voting at any voluntary liquidation meeting, a secured creditor shall, unless he surrenders his security, lodges with the liquidator, or where there is no liquidator, at the registered office of the company, before the meeting, a statement giving the particulars of his security, the date when it was given and the value at which he assesses it, and shall be entitled to vote only in respect of balance due to him, if any, after deducting the value of his security. (17)Effect of voting by a secured creditor.-if a secured creditor votes 26

27 in respect of his whole debt he shall be deemed to have surrendered his security, unless the Tribunal on application is satisfied that the omission to value the security was due to inadvertence. (18) Procedure when secured creditor votes without surrendering security.-the liquidator may within fifteen days from the date of the meeting at which a secured creditor voted on the basis of his valuation of the security, require him to give up the security for the benefit of the creditors generally on payment of the value so estimated by him, and may, if necessary, apply to the Tribunal for an order to compel such creditor to give up the security: Provided that the Tribunal may, for reasoned cause shown, permit a creditor to correct his valuation before being required to give up the security, upon such terms as to costs as the Tribunal may consider just. (19) Admission or rejection of proofs for purposes of voting.-the chairman shall have power to admit or reject a proof for the purposes of voting, but his decision shall be subject to appeal to the Tribunal. If he is in doubt whether a proof shall be admitted or rejected, he shall mark it as objected to and allow the creditor to vote subject to the vote being declared invalid in the event of the objection being sustained. (20) Minutes of proceedings - (i) The chairman shall cause minutes of the proceedings at the meeting to be drawn up and entered in the Minute Book and the minutes shall be signed by him or by the chairman of the next meeting. (ii) A list of creditors and contributories present at every meeting shall 27

28 be made and kept as in Form No. 31. (21)Report to the Tribunal The Company Liquidator shall, within seven days of the conclusion of the meeting, report the result thereof to the Tribunal in Form No. 24.The report shall include the details of advices given by the Official Liquidator or his nominee and in case of disagreement with his advices; the reasons thereto shall also be mentioned in the report. 13. PROXIES IN RELATION TO MEETINGS OF CREDITORS OR CONTRIBUTORIES (1) Form of proxies - A creditor or contributory may give a proxy to any person. A proxy shall be in Form No. 32. (2)Proxies to Liquidator or chairman - A creditor or contributory in a winding-up by the Tribunal may appoint the Company Liquidator, and in a voluntary winding-up, the liquidator, or if there is no liquidator, the chairman of the meeting, to act as his proxy. (3) Use of proxies by deputy - Where Company Liquidator who holds any proxies cannot attend the meeting for which they are given, he may in writing depute some person under his official control to use the proxies on his behalf and in such manner as he may direct. (4)Forms to be sent with notice - Forms of proxies shall be sent to the creditors and contributories with the notice summoning the meeting. No name shall be inserted or printed in the form before it is sent. 28

29 (5) Proxies to be lodged - A proxy shall be lodged not later than fortyeight hours before the meeting at which it is to be used, with the Company Liquidator in a winding-up by the Tribunal. In the event of the proxy of a creditor or contributory not knowing English, it may be mentioned by the witness that he certifies what was explained to the creditor or contributory s proxy in the language known to him, and give the creditor's or contributory's name in English below the signature. (6) Voting by proxies /authorised representatives - A creditor or contributory may vote either in person or by proxy. Where a person is authorised in the manner provided by section 113 to represent a Corporation at any meeting of creditors or contributories, such person shall produce to the Company Liquidator or chairman of the meeting a copy of the resolution so authorising him. Such copy must be certified to be a true copy by a director, the manager, the secretary or other officer of the company dulyauthorised in that behalf who shall certify that he is so authorised. However, neither a minor nor a person holding a place of profit in respect of the assets of the company shall be appointed as a proxy. 14. ATTENDANCE AND APPEARANCE OF CREDITORS AND CONTRIBUTORIES (1) Attendance at proceedings - (i) Save as otherwise provided by these Rules or by an order of Tribunal, every person for the time being on the list of contributories of the company and every creditor whose debt has been admitted by Company Liquidator wholly or in part shall be at liberty at his own expense to 29

30 attend the proceedings before the Tribunal or before the Company Liquidator and shall be entitled upon payment of the costs occasioned thereby to have notice or all such proceedings as he shall, by request in writing addressed to the Company Liquidator, desire to have notice of; but if the Tribunal shall be of opinion that the attendance of any such person has occasioned any additional costs which ought not to be borne by the funds of the company, it may direct such costs or a gross sum in lieu thereof to be paid by such person and such person shall not be entitled to attend any further proceedings until he had paid the same. No contributory or creditor shall be entitled to attend any proceedings before the Bench, unless and until he or an Authorised representative on his behalf has filed a memo of appearance with the Registrar. The Registrar shall keep an "Appearance Book" in which all such appearances shall be entered. (2)Representation of creditors and contributories before Tribunal.-The Tribunal may, if it thinks fit, appoint from time to time any one or more of the creditors or contributories to represent before the Tribunal at the expense of the company all or any class of creditors or contributories upon any question or in relation to any proceedings before the Tribunal, and may remove any person so appointed, if more than one person is appointed under this Rule to represent one class. The persons soappointed, shall employ the same authorised representative to represent them, and where they fail to agree as to the authorised representative to be employed, the Bench may nominate an authorised representative for them. 15. Submission of periodical report to Tribunal - (1)For the purposes of sub-section (1) of section 288 of the Act, 30

31 Company Liquidator shall make a periodical report to the Tribunal and in any case make a report at the end of each quarters (quarters ending on 31 st March, 30 th June, 30 th September & 31 st December) on the progress of the winding up of the company inform No. 26 which shall be made before the end of the following quarter. (2) The Tribunal may, on an application by the Liquidator, review any order made by it and make such modification as it thinks fit with or without any further directions. 16. Application for stay of winding-up proceedings (i) An application under sub-section (1) of section 289 for stay of proceedings in the winding-up shall be made to the Tribunal in Form No. 33, upon notice to the parties to the winding-up petition and to such other persons as the Tribunal may direct enclosing a scheme for rehabilitation and notice shall be given to the Company Liquidator. (ii) An application under sub-section (4) of section 289 for stay of proceedings in the winding-up shall be made by the Company Liquidator to the Tribunal in Form No.34 upon notice to the parties to the windingup petition and to such other persons as the Tribunal may direct specifying the grounds for making the application. (iii) Where an order is made staying proceedings, the Company Liquidator shall forthwith file a certified copy thereof with the Registrar of Companies within a period of 15 daysdays of passing of such order. 17. COLLECTION AND DISTRIBUTION OF ASSETS IN A WINDING- UP BY TRIBUNAL 31

32 (1)Company Liquidator to be in the position of a receiver.-for the discharge by the Company Liquidator of the duties imposed by subsection (1) of section 290, the Company Liquidator shall, for the purpose of acquiring and retaining possession of the property of the company, be in the same position as if he were a receiver of the property appointed by the Tribunal, and the Tribunal may on his application enforce such acquisition or retention accordingly. (2)Company's property to be to surrendered to Company Liquidator on requisition.-the powers conferred on the Tribunal by sub-section (3) of section 283 may be exercised by the Company Liquidator. Any contributory for the time being on the list of contributories, trustee, receiver, banker or agent or officer of a company which is being wound-up under order of the Tribunal, shall on notice from the Company Liquidator and within such time as he shall by notice require, pay, deliver, convey, surrender or transfer to or into the hands of the Company Liquidator any money, property or documents, books or papers which happen to be in his hands for the time being and prima facie entitled. Where the person so required fails to comply with the notice, the Company Liquidator may apply to the Tribunal for appropriate orders. The notice shall be in Form No CALLS IN A WINDING-UP BY THE TRIBUNAL (1)Company Liquidator to realise uncalled capital. -Notwithstanding any charge or encumbrance on the uncalled capital of the company, the Company Liquidator shall alone be entitled to call and realise the 32

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